Preamble

The House met at half-past Two o'clock

Preamble

PRAYERS

[Mr. SPEAKER in the Chair]

DEATH OF A MEMBER

Mr. Speaker: I regret to have to inform the House of the death of Thomas Henry Swain, esquire, Member for Derbyshire, North-East, and I desire on behalf of the House to express our sense of the loss we have sustained and our sympathy with the relatives of the hon. Member.

Oral Answers to Questions — PRICES AND CONSUMER PROTECTION

Director General of Fair Trading

Mr. Madden: asked the Secretary of State for Prices and Consumer Protection when he intends next to meet the Director General of Fair Trading.

Mr. Durant: asked the Secretary of State for Prices and Consumer Protection when he plans next to meet the Director of Fair Trading.

The Minister of State, Department of Prices and Consumer Protection (Mr. John Fraser): Tomorrow.

Mr. Madden: Will the Minister ask the Director General what progress is being made in his discussions with the building societies on the introduction of a joint valuation and structural survey scheme for potential house purchasers? Is the Minister aware that the scheme is now in its seventh draft and that the discussions have been rumbling on for about 18 months? When does he expect the scheme to be introduced?

Mr. Fraser: I understand that the Office of Fair Trading and the building societies are likely to reach agreement in principle very shortly. I shall then make an announcement.

Mr. Durant: When the Minister meets the Director General tomorrow will he ask him whether it his intention to intervene in the case of Leisure Arts to deal with the anomalies and so-called malpractices?

Mr. Fraser: If the Director General wishes to take action, he has adequate powers under part III of the Fair Trading Act. However, I am not aware of any breaches of the law which have come to his attention.

Mr. Greville Janner: When the Minister meets the Director General will he congratulate him on the work that he and his Department are doing and ask what further plans he has for extending the protection of the consumer against exploitation?

Mr. Fraser: That is a wide matter, but I shall certainly put the question to the Director General.

Price Commission

Mr. Neubert: asked the Secretary of State for Prices and Consumer Protection when he intends next to meet the chairman of the Price Commission.

Mr. Canavan: asked the Secretary of State for Prices and Consumer Protection when he expects to meet the chairman of the Price Commission.

The Secretary of State for Prices and Consumer Protection (Mr. Roy Hattersley): The chairman of the Price Commission and I meet frequently. No firm date has been set for our next meeting.

Mr. Neubert: Although several factors contributed to the decision, does not the Price Commission's 12-month freeze on British Oxygen prices cast some doubt on denials that the Commission is acting as a sanction in support of the Government's pay policy? In this connection, was not the Secretary of State's speech to Lancaster Labour Party a fortnight earlier highly significant? In that speech he linked the importance of private sector pay settlements to inflation in the next


few months with the increased powers recently given to the Price Commission.

Mr. Hattersley: The hon. Gentleman continues in vain his efforts to demonstrate that I direct the work of the Price Commission. I do not, nor am I able to under the law. What the report into British Oxygen demonstrates is that all costs contribute to prices, including wage costs. If that comes as news to the hon. Gentleman, it does not to anybody else.

Mr. Canavan: Will my right hon. Friend tell the Chairman of the Price Commission that it is about time he started using his powers to freeze prices instead of standing by and watching profiteers exploiting ordinary working people? For example, why were Scottish & Newcastle Breweries Ltd. allowed a recent increase of 3p on a pint of beer when that company's pre-taxed profits for last year alone amounted to £35 million?

Mr. Hattersley: I suspected that that was the supplementary question which my hon. Friend would ask. The powers of the Price Commission enable it to make discretionary investigations of price applications and to make judgments about where an investigation is justifiable and whether a price increase could be justified, against the criteria that have been set down by the Act. It is not for me to interpret how the Price Commission acts in relation to individual companies. We must assume that in the case to which my hon. Friend referred the Commission decided that an investigation or freeze was not within the terms of the Act. In the case of two other breweries, where the action sought by my hon. Friend was taken, we must assume that the Commission judged that that was within the terms of the Act.

Mr. Tim Smith: Is the Secretary of State aware that in almost every Price Commission report to date the Commission has commented on the management efficiency of the company under investigation? Will he ask the chairman of the Commission to define management efficiency? If the Commission does not do so, does the Minister believe that it is qualified to comment upon it?

Mr. Hattersley: I do not believe that to be a task which I can impose rightly on the chairman of the Price Commission.
I believe that in a number of reports, known both to myself and to the hon. Gentleman, it has been demonstrated that with greater management efficiency the consumer can be spared an unnecessary price increase. It is the duty of the Price Commission to ensure that when a price increase is unnecesary it is not implied. I hope that the Price Commission will continue to carry out that duty.

Mr. Skinner: Will my right hon. Friend accept that if the Government are goaded by the Opposition into switching from direct taxation to indirect taxation, in the next Budget or any other, that will increase prices? Will he resist any moves in that direction in every capacity in which he serves?

Mr. Hattersley: The Budget judgment and intentions are not matters for me. The Chancellor of the Exchequer is as well aware as is my hon. Friend that any increase in indirect taxes increases the cost of living and the cost of people's normal purchases. On the other hand, my right hon. Friend's principal obligation on inflation is to run the sort of economy that holds prices down and beats inflation in the long run. He has to balance the alternative obligations, all of which lead to the same end.

Mr. Giles Shaw: The Secretary of State referred earlier to management efficiency. As he is meeting the chairman of the Price Commission tomorrow, will he discuss the amount of management time that is wasted inefficiently in dealing with Commission inquiries? Why does the Commission send out detailed questionnaires and follow them up with detailed questionnaires from the consultants it employs? Why cannot the Commission be more efficient?

Mr. Hattersley: The hon. Gentleman ought to give some hard examples rather than make general allegations. A number of companies that have been investigated by the Commission have published their appreciation of the way that the Commission works and endorsed its judgment. If the hon. Gentleman wants to give examples of unnecessary questions and time being wasted, he should state them specifically, instead of making general allegations.

Mr. Giles Shaw: I will.

Price Increases

Mr. Dykes: asked the Secretary of State for Prices and Consumer Protection what was the percentage movement in the retail price index in the last two quarters of 1978.

Mr. Hattersley: Compared with the previous quarter, the retail price index rose by 1·7 per cent. in both the third and fourth quarters of 1978.

Mr. Dykes: In view of those figures and the likely figures for January and the first quarter of this year, why are the Government so confidently promising the public that inflation will not go into double figures again this year? What factors have the Government taken into account in making that rather rash promise?

Mr. Hattersley: When the hon. Gentleman reads the figures in Hansard he will find that they are not as bad as his prepared supplementary question anticipated. The Government's reasons for what we have said about double-figure inflation are clear. It still remains within the power of the people and the Government to keep inflation at or about its present level. The decision about that is one for the Government and the people in partnership. We hope that the people, particularly through the wage claims that they will be pursuing in the next month or two, will demonstrate their determination to keep inflation within manageable proportions.

Mr. Gwilym Roberts: Does my right hon. Friend agree that the fundamental factor in this matter is the strength of the economy and the fact that the pound is therefore remaining strong? Does he agree that this will be reflected in costs and, therefore, wholesale prices in coming months, and that it is a common belief among most forecasters that inflation will not only remain in single figures for the rest of this year but will be considerably lower than some of the previous forecasts?

Mr. Hattersley: The facts to which my hon. Friend has referred are important. The pound remains strong and is stronger than it has been for the past two years. That will clearly have a beneficial effect on import prices and, therefore, on the rate of increase of inflation in general.

Mrs. Sally Oppenheim: As the rate of inflation has now established a clear upward trend, with a return to double-figure inflation being widely forecast, will the Secretary of State admit that the Government's counter-inflation policy is in ruins and that a further upsurge in inflation is likely as a result of the increase, among other things, in local authority rates, particularly the increases being proposed by Labour local authorities?

Mr. Hattersley: I agree with hardly anything that the hon. Lady said. Her forecasts of the changes in the rate of inflation have been uniquely bad over the past two years.

Mrs. Sally Oppenheim: They have not.

Mr. Hattersley: I apologise. The hon. Lady is right. Her forecasts have not been uniquely bad. The Leader of the Opposition said on Saturday that the Government's vaunted single-figure inflation rate was a nine month wonder—when it had already been in single figures for 13 months. Someone is even worse than the hon. Member for Gloucester (Mrs Oppenheim) in these matters.
The position is clear. It is possible for this country to maintain a rate of inflation at or about the present level as long as the country co-operates in bringing about the sort of policies that achieve that end. If the hon. Lady and her colleagues continue to predict massive increases in prices they will be creating the circumstances that they pretend to fear.

Inflation (International Comparisons)

Mr. Gwilym Roberts: asked the Secretary of State for Prices and Consumer Protection what change has taken place in the rate of inflation between January 1976 and January 1979; how this compares with January 1971 to January 1974: and if he will give comparable figures for the Federal Republic of Germany and the United States of America.

The Under-Secretary of State for Prices and Consumer Protection (Mr. Robert Maclennan): Between January 1976 and 1979, the annual rate of inflation in the United Kingdom fell from 23·4 per cent. to 9·3 per cent. Between January 1971 and January 1974 the rate rose under the previous Administration from 8·5 per cent to 12 per cent. The annual percentage inflation rates in January 1971, January


1974 January 1976 and December 1978 for West Germany were 4·2, 7·4, 5·3, 2·4 and for the United States of America were 5·2, 9·4, 6·8, and 9, respectively.

Mr. Roberts: Does my hon. Friend agree that those long-term figures demonstrate the poor record of the Conservative Party on inflation and the considerable achievements of the present Government, with the co-operation of the trade union movement and working people generally?

Mr. Maclennan: I agree with my hon. Friend that the inflation that the Opposition induced during their period of office was largely their own responsibility, and particularly the responsibility of the then Chancellor of the Exchequer, Lord Barber.

Mr. Adley: Can the Minister remind me and the House about the strange, missing two years? Which Government were in office between February 1974 and January 1976? Did the Minister support them?

Mr. Maclennan: The hon. Gentleman seems to have no memory at all.

European Community (Food Prices)

Mr. Marten: asked the Secretary of State for Prices and Consumer Protection whether he has made any representations to the EEC concerning the level of prices.

Mr. Maclennan: I frequently attend meetings of the Agriculture Council. The Government have consistently made clear their strongly held view that the common price level in the EEC is too high.

Mr. Marten: What has the Common Market actually done to help bring down prices in this country?

Mr. Maclennan: It is reckoned that food prices are about 10 per cent. higher than they would be if we were not members of the EEC, but my right hon. Friend the Minister of Agriculture, Fisheries and Food is negotiating to try to eliminate the surpluses and excessive common price increases. It is hoped that that will help to stabilise the trend which is wholly unacceptable to the Government. As a footnote to that answer, there is an EEC subsidy on butter which is worth 5p per pound.

Mr. Heffer: Does my hon. Friend agree that, apart from the inflationary policies carried out by the Opposition when they were in office, one of the reasons for the dramatic increase in prices was that we entered the Common Market? Does he agree that it is only now that some of those prices are beginning to level out, at a much higher level than they should have been in the first place?

Mr. Maclennan: Food prices have increased as a result of our joining the EEC. That was brought about in part by our having to move through five stages of increases to price levels that were more approximate to those of the Community. That was understood and predicted to be inevitable when we took the decision and the country voted in the referendum to remain in the Community.

Mrs. Kellett-Bowman: Is the Minister aware that when the cost of living rose in 1978 by 8·4 per cent., only 0·4 per cent. of that was due to the 7·5 per cent. devaluation of the green pound, whereas twice as much—0·8 per cent.—was due to an increase in car prices? Does he not believe that we must have an increase in British agricultural output if we are to maintain a steady supply of food to consumers and to sustain our balance of payments in the coming years?

Mr. Maclennan: It is certainly the Government's policy, as described in the recent White Paper, to see increased agricultural production where it can be achieved efficiently and competitively. For that purpose, it is necessary that from time to time farmers' support prices be increased. That is a recognised part of the Government's policy.

Price Commission (Disallowed Price Increases)

Mr. Sainsbury: asked the Secretary of State for Prices and Consumer Protection whether he will direct the Price Commission to include in its next report an analysis of the factors used in its decisions on disallowing price increases, including whether or not productivity schemes have been found not to be self-financing.

Mr. Hattersley: No, Sir. The Price Commission Act 1977 gives me no powers to direct the Commission as to the matters to be included in its quarterly reports.

Mr. Salisbury: Does the Secretary of State agree that if, as seems to be indicated by the recent report on the British Oxygen Company, the question whether a productivity deal is self-financing will become a critical factor in a Price Commission decision, two points follow? The first is that it would be illogical to make that decision binding for 12 months, because clearly within that period productivity could change dramatically. The second is that if the private sector is to suffer from this it will need to be very much reassured that the public sector monopolies' so-called productivity deals are equally rigorously scrutinised.

Mr. Hattersley: I regard it as a matter not of suffering but of simple common sense. If a company accepts a further financial obligation and increases its costs in a way that at one time it suggests will not result in increased prices, but it then admits has resulted in increased prices, it should have no automatic right to pass on those increased prices to its customers. That seems to me to be elementarily true and elementarily right.
With regard to the hon. Gentleman's second point, he must understand that the Price Commission makes its own judgments about self-financing productivity deals or, for that matter, any other element in a company's or industry's costs. When it inquires into the public sector, as it does from time to time, it can make exactly the same recommendation as it did in the case of the British Oxygen Company.
Thirdly, as to altering the imposition of a price freeze if a company were to increase its efficiency, if the productivity deal were suddenly to bear the fruits that were promised, I made it clear in the press notice accompanying the report on the BOC that the Government would respond in exactly that way.

Mr. Durant: Will the Secretary of State bear in mind what my hon. Friend the Member for Pudsey (Mr. Shaw) said about firms that feel that they waste a great deal of time dealing with the Price Commission? Will he do so particularly in the case of Metal Box, which merely passed on the increased price of tinplate from the British Steel Corporation? There was no additional increase, but a great deal of time was spent looking at

that increase in price, which was obviously allowed because the Government had agreed to the price increase by the BSC.

Mr. Hattersley: The case of Metal Box demonstrates a number of morals that we should draw from Price Commission investigations. Not the least is that one of the reasons why that investigation came about was that pressure was brought to bear by the Food Manufacturers' Federation which said that it wanted an inquiry into tinplate prices and the prices of the containers in which its members sold their wares. One moral to be drawn is that the Commission should be allowed to make its own judgments, rather than have investigations imposed on it by vested interests of one sort or another.

Mr. Giles Shaw: Does the right hon. Gentleman agree that there is also a moral to be drawn on the subject of disallowed prices? Would he care to comment on the position with regard to paraffin, where a controlled price agreed between his Department and the Secretary of State for Energy has resulted in the wholesale price going up but the retail price being fixed? As a consequence there is now a grave shortage of paraffin in certain parts of the country because distributors no longer find it profitable to sell or stock it. Is not this, too, something that the Secretary of State should investigate?

Mr. Hattersley: In principle, I am not attracted by the idea of controlled and fixed prices. I much prefer to allow a freer system of price determination to come about, and when it is not free, because the price is determined by monopolies rather than competition, I am in favour of the Price Commission's examining the circumstances in that particular case. Therefore, the hon. Gentleman's general point receives some sympathy from me, but I do not think that the conclusion that he draws about the specific example is correct.

Inflation

Mr. Michael Morris: asked the Secretary of State for Prices and Consumer Protection what are his forecasts for price inflation, as measured by the retail price index, in the coming year.

Mr. Montgomery: asked the Secretary of State for Prices and Consumer Protection what estimate he has made of the likely trends in the retail price index up to the end of 1979.

Mr. Shersby: asked the Secretary of State for Prices and Consumer Protection what is his current forecast of the date on which the 12-month rate of increase in retail prices will rise above 10 per cent.

Mr. Hattersley: The Government's short-term economic forecast was published on 15 November 1978. Such forecasts are of course conditional upon a number of financial and economic factors—not least the growth of earnings.

Mr. Morris: I am grateful for that answer, but is the right hon. Gentleman aware that I ask that question now because there have been a number of changes in the economy since that forecast was made? It is most disappointing not to be able to receive a specific answer. May I ask the right hon. Gentleman now to give me a specific figure of the latest forecast increase in relation to this question?

Mr. Hattersley: As the hon. Gentleman must know, it is not possible to give a precise estimate of the sort that he wants, although, as part of the Budget, the obligations placed upon my right hon. Friend the Chancellor of the Exchequer to publish a forecast will mean that a more up-to-date figure is provided. All that I can tell the hon. Gentleman—and I hope that he and the country will believe this—is that it remains possible that we can keep inflation at or about its present level. But that requires the wholehearted cooperation of industry as a whole, the British trade union movement and all those who contribute to the causes of increased inflation or stable inflation.

Mr. Montgomery: How does the Secretary of State explain the fact that in Abertillery on 28 November 1978 he said that it was possible to forecast five to six months ahead because of factors that were known to his Department? Is not his newfound modesty largely due to the fact that he knows all too well that inflation will be back in double figures before very long?

Mr. Hattersley: The hon. Gentleman was one of those who at the time of the Abertillery forecast announced that I could not make predictions with such accuracy. In fact, what I said then turned out to be exactly right. We achieved single figures in the early months of last year and we remained at or about that figure for the following year. What was different then from now is very clear. The overall level of earnings is not easy to predict and is not easy to determine. If it remains at the reasonable level advocated by the Government we can have another good year of inflation outturn. If not, inflation may well accelerate again. What I am reminding the House of today is the importance of holding down those costs that might accelerate the retail price index. I hope that Opposition Members will support us in making that point.

Mr. Litterick: Can my right hon. Friend tell the House the extent to which the no doubt approximate estimate of future price increases is attributable, first, to wage increases; secondly, to factors external to the British economy; and, thirdly and very important, to those factors that are directly under the Government's control?

Mr. Hattersley: Of course, there are some external factors. My hon. Friend would not expect me to pretend otherwise. The potential increased cost of imported oil is an obvious example. But I must tell my hon. Friend this about the other two categories. Those factors that can be determined by the Government—the control of the money supply and the limit on the expansion of the public sector borrowing requirement—have been moving in the right direction for the past two years. In all those particulars the Government have acted in a way consistent with our inflation targets. That leaves wage costs, which are a substantial contribution to every price increase. For the rest of the year they will determine our inflation by the end of 1979 and the early months of 1980.

Mr. Rost: The Secretary of State is very good at blaming the Government's appalling record of rising prices on everybody else and everything else, particularly wage costs. Will he now tell us what proportion of the increased inflation that is expected is due to the Government's inability to control their own spending to


keep it within what they are prepared to raise in taxation?

Mr. Hattersley: I said a moment ago, and I repeat, that the Government have a better record over the public sector borrowing requirement, domestic credit expansion and the money supply than our predecessors. If the hon. Gentleman has any doubts about that, I suggest that he reads "An End To Promises" written by one of his hon. Friends, who described the problems faced by the previous Government in the dying days of that Administration in terms that I have used to describe them at previous Question Times.

Mrs. Sally Oppenheim: How can the Secretary of State reconcile the fact that the trend in inflation has been rising steadily for the past three months, at least since last November, with his own optimistic statements in June and November last year to the effect that 1979 would be another successful year in terms of containing inflation? As he appears to be having some difficulty in making long-term forecasts, may I offer him the services of Conservative research department statisticians to explain to him why my forecasts of last year are proving right and his are proving wrong?

Mr. Hattersley: I take it that those are the same statisticians as urged the Leader of the Opposition to talk about nine months in single figures four months too late. But, putting that aside, knowing the hon. Lady to be an assiduous student of all my speeches, I always look, on the morning of my Question Time, to see what predictions I have made in the recent past. The predictions I made during the months to which she referred are boringly identical with what I have said today, namely, that inflation during the early part of 1979 was a matter for the British nation as a whole to decide that high wages would produce high inflation rates and vice versa. That is what I said then, and that is what I repeat now.

Mrs. Oppenheim: On a point of order, Mr. Speaker. I should like to provide you with examples of quotations from speeches by the Secretary of State—

Mr. Speaker: Order. I read speeches by right hon. and hon. Members on both sides of the House and keep my opinions to myself.

£ Sterling

Mr. David Hunt: asked the Secretary of State for Prices and Consumer Protection if he will estimate by how much the devaluation of the £ sterling, since October 1974, has affected food prices.

Mr. Maclennan: It is not possible to distinguish the effects of the changes in the exchange rate from the many other factors affecting food prices over the period from October 1974.

Mr. Hunt: Will the Minister accept that, even if he were able to calculate a figure, the position would be much worse were it not for the achievements of the private enterprise oil industry in the North Sea? Will he accept, further, that the present position is directly as a result of Government mismanagement which has made life in this country very much more difficult, especially for those on fixed incomes?

Mr. Maclennan: The hon. Member will be aware that so far from the pound sterling having been devalued during the past year it has appreciated against a trade-weighted basket of currencies by 1·4 per cent., which is one of the contributory factors towards the stabilisation of the inflation rate.

Mr. Gwilym Roberts: Will my hon. Friend congratulate the Minister of Agriculture, Fisheries and Food on his determined battle against devaluation of the green pound, and will he ask him to continue this battle, since it is in the interests of housewives in general?

Mr. Maclennan: It is the Government's policy to recognise from time to time that changes in the green rate are inevitable in the wider interest of the economy as a whole. But my hon. Friend is right to point to the determination of my right hon. Friend the Minister of Agriculture, Fisheries and Food to ensure that the interests of consumers and counter-inflation policy are borne very much in mind in the balance against other pressures for change.

Mr. Dykes: In view of the earlier references to the common agricultural policy, does the Minister agree that, notwithstanding the partial recovery of the pound against other European currencies, the


green pound differential through the MCAs in effect provides a substantial subsidy to our farm prices, representing one quarter of our contribution to the Community budget?

Mr. Maclennan: I recognise that if we were to abandon altogether the present green pound level it would mean a substantial increase in the price of food. I do not know whether that is what the hon. Gentleman is recommending. It would mean an increase in the food index of about 6 per cent.

Drugs

Mr. Pavitt: asked the Secretary of State for Prices and Consumer Protection if he will take steps to monitor the increase of the price of drugs and restrict profit margins, in the light of the 62 per cent. margin on the price to the retailer of PRO-HYD 50 capsules 30.

Mr. Maclennan: It is for the Price Commission to decide whether to investigate a particular price increase or the margin of a particular distributor.

Mr. Pavitt: Will my hon. Friend see the Price Commission about these inordinate increases? The example which I give in my original question is only one of dozens of similar price rises in pharmaceutical products. Even worse, is my hon. Friend aware that the taxpayer is paying 100 per cent. more for commonly used drugs in the National Health Service than he was a year ago, and that this is a complete twist of the inflationary spiral about which his Department should be doing something?

Mr. Maclennan: My hon. Friend will know that the prices of certain drugs are controlled by the Pharmaceutical Price Regulation Scheme and not by the Price Commission. To that extent, therefore, my hon. Friend's question should be directed to my right hon. Friend the Secretary of State for Social Services. To the extent that there are drugs which are not involved in that scheme, they are subject to the Price Commission's examination, and my right hon. Friend directed the Price Commission to examine the prices, costs and margins in the production and distribution of proprietory non-ethical medicines. My hon. Friend will have read that report, and he will

recognise that it does not bear out fully all his assertions.

Mr. Michael Morris: Will the hon. Gentleman recognise that this question has nothing to do with the type of medicines that he referred to the Price Commission? The hon. Member for Brent, South (Mr. Pavitt) mentioned ethical products. However, before referring any matter to the Price Commission, will the Minister draw to its attention the recent report of the Office of Health Economics which said that the chief problem in the NHS was for primary care to be increased, and, concomitant with that, the greater use of drugs and research into drugs? If the drug companies are to succeed they have to be able to market their products properly.

Mr. Maclennan: I do not think that removes from the Government the responsibility to scrutinise carefully, through the Pharmaceutical Price Regulation Scheme, the prices of drugs and, in the non-ethical sphere, the Price Commission's responsibility. But I must re-emphasise that it is not a matter on which my right hon. Friend can direct the Price Commission. The Commission is required to investigate at its own discretion where there is a suspicion that a price increase is not justified.

Food Prices

Mr. Peter Morrison: asked the Secretary of State for Prices and Consumer Protection what has been the increase in food prices since February 1974.

Mr. Maclennan: In mid-January the food price index had increased by 115·6 per cent. since 1974.

Mr. Morrison: Will the Minister say, in view of that very substantial increase in the cost of food over the past five years, what his estimates are for the increased cost of food over the next 12 months?

Mr. Maclennan: All predictions of that kind are fraught with considerable difficulties. That is especially so in the case of food. The price of fresh food, as has been demonstrated by the events of January, is extremely subject to fluctuations due to weather. Seasonal foods vary very much in price from year to year. A very large part of the recent


increase has been due to the quite exceptional rise in the price of vegetables.

Mr. Hardy: Although my hon. Friend is reluctant to offer any prediction, has he made any study of Conservative Party policy, such as it is? If so, does he agree that the implications of its policy are that food prices would rise enormously in a matter of months if Britain had the misfortune to have to endure one of its Administrations?

Mr. Maclennan: The policy of the Conservative Party on food prices appears to be characterised by a completely unbalanced view that the green pound should be devalued as soon as possible, with all the disadvantages for the economy at large which would flow from that. The Opposition seem not to recognise the damage which would flow from any such sudden jump. The Government's policy is a balanced one bearing in mind both the needs of the producers and the pressures to which consumers are subject.

Mr. Ridsdale: Does the Minister agree with the head of the Economic Commission that one of the chief reasons for the increase in the price of food has been the vast increase in transport costs?

Mr. Maclennan: It is true that the cost of distribution is a major part of the end price paid by the consumer in the shop. A number of studies have been carried out by the Price Commission into the distribution of meat and fish especially. If the hon. Member has in mind a specific problem, perhaps he will draw it to the attention of my right hon. Friend.

Mr. Grocott: Can my hon. Friend confirm that the view of the Conservative Party is identical with that of the National Farmers' Union on all food matters in that it calls for the complete devaluation of the green pound to bring our prices into line with those of other EEC countries? Will my hon. Friend also confirm that it is the Government's resolute determination to support completely the stance of my right hon. Friend the Minister of Agriculture, Fisheries and Food in this year's price round negotiations, whatever the effect it has on our relationships with the other eight nations?

Mr. Maclennan: I have noticed that the farming press, which normally speaks with some favour of the Conservative Party, has not spoken with favour of its agricultural policy and indeed on more than one occasion has drawn attention to its absence. But I agree that my right hon. Friend is right to continue the policy which has been the policy of the Government over the past few years to seek balanced alterations in the green currency rate at the appropriate moments. I note what Mr. Richard Butler is reported to have said today. I do not know whether the Opposition are calling for a 15 per cent. devaluation of the green pound, as he has, but the cost consequences for the housewife will have been noted.

Mr. Giles Shaw: Reverting to the supplementary question asked by the hon. Member for Rother Valley (Mr. Hardy), is the Minister aware that the Conservatives' price proposals on agricultural produce to move to common prices would result in a price increase of about 1 per cent. over five years? Bearing in mind what the Government have done with regard to VAT on food, which put up the food index by 4 per cent. at a stroke, who is the housewife's better friend?

Mr. Maclennan: The hon. Gentleman is wholly wrong. The effect of eliminating MCAs in the way that he has described would be to put up food prices by about 6 per cent. at a stroke. That is something that no responsible Government could contemplate. Although the needs of the farming community are very much borne in mind by the Government, and have been demonstrated on a number of occasions, it is not possible to insulate the farming community wholly from our rate of inflation compared with that of the Community at large. We cannot hope to achieve common price levels until we have eliminated these disparities in our inflation levels. It is high time that the Conservative Opposition recognised that.

Mr. Nicholas Winterton: asked the Secretary of State for Prices and Consumer Protection what is the increase in the retail price index, exclusive of seasonal foods, over the last six months, expressed at an annual rate.

Mr. Cormack: asked the Secretary of State for Prices and Consumer Protection what is the average annual rate of increase in the retail price index since February 1974.

Mr. Tim Smith: asked the Secretary of State for Prices and Consumer Protection how much the retail price index has risen since February 1974.

Mr. Aitken: asked the Secretary of State for Prices and Consumer Protection what is the increase in the retail price index, excluding seasonal foods, over the last six months.

Mr. Temple-Morris: asked the Secretary of State for Prices and Consumer Protection what is the latest year-on-year figure for the percentage increase in the retail price index.

Mr. Newton: asked the Secretary of State for Prices and Consumer Protection what has been the percentage increase in the retail price index over the past 12 months.

Mr. Hattersley: The retail price index has risen at an average annual rate of 15·6 per cent. since February 1974, giving a cumulative increase of 103·7 per cent. The increase over the last 12 months has been 9·3 per cent. The index, excluding seasonal foods, has risen by 4·3 per cent. over the last six months, which is equivalent to an annual rate of 8·8 per cent.

Several Hon. Members: rose—

Mr. Speaker: Order. I propose to call first those six hon. Members whose questions are being answered.

Mr. Winterton: I am grateful to the Secretary of State for that information. Since the Government consider this index the most reliable index with regard to inflation, will he now concede that the Government's claim to be able to maintain single figure inflation throughout this election year is now, unfortunately, entirely bogus? Does he not accept that one way to keep down inflation is to encourage industry? Does he not agree that through various measures which the Government have introduced they have produced disincentives for industry which could make such a contribution to main-

taining a low figure of inflation in this country?

Mr. Hattersley: No. I believe that it is still possible to maintain the inflation rate, as measured by the RPI, at or about its present level. I share the hon. Gentleman's view that the RPI is the best measure of inflation, which is why I did not draw attention to the final sentence of my answer, which shows that what is popularly called "the underlying rate is falling. I have stuck to the RPI in good times and bad. I have not chosen my index to demonstrate the best figure. I still believe in the RPI, and I believe also that it is possible, so long as the nation as a whole behaves sensibly, to keep inflation at or about its present figure.

Mr. Cormack: Will the Secretary of State tell us how this 103 per cent. compares with the predictions that he and the Chancellor of the Exchequer made during the general elections of 1974? Can he also tell the House which British Government in history have had a worse record than this one on this front?

Mr. Hattersley: The elections of 1974 were characterised by an argument concerning how inflation had been created. I share the view—I repeat it—that that was in part expressed by the hon. Gentleman who wrote "The End to Promises" that many of the causes of inflation in 1974–75 were established well before this Government came to power. The important achievement is that over the last two years we have cut the inflation rate by more than half. I believe that we can keep it at or about its present level, and we must struggle to do so.

Mr. Smith: Is not the increase in me retail price increase since February 1974—to use the Secretary of State's own words—uniquely bad? How much worse is it than the increase under any previous British Government this century?

Mr. Hattersley: This is the only British Government this century who came to power facing an increase of 400 per cent. in oil prices, a money supply that was wholly out of control, a public sector borrowing requirement that was expanding and industry that was rent by the divisions caused by the previous Government's industrial policy. For two years we overcame those difficulties, and since then we have managed to reduce the rate


of inflation. That is a fact with regard to the last five years.

Mr. Temple-Morris: Modest man that he is, does the Secretary of State agree that since his Government came into office the pound has halved in value, or, to put it another way, that the cost of living has doubled? Modest man that he is, will he admit to any responsibility at all lying with this Government, and, if so, what responsibility?

Mr. Hattersley: I have repeated this many times, and I shall repeat it again if it pleases the hon. Gentleman. I suppose that in 1974–75 we could have moved more quickly to remedy the errors of our predecessors. We could have attempted more quickly to get the money supply and the public sector borrowing requirement under control. Perhaps we did not clean up the mess sufficiently quickly, but that is the full extent of our responsibility.

Mr. Madden: Can my right hon. Friend say what effect increasing television licences has had on the index? Does he favour abolishing the licence and raising the necessary revenue for the BBC from the Exchequer?

Mr. Hattersley: I cannot give my hon. Friend the precise figure for which he asks, although it would be in points of decimals. As he knows, the second part of his question is a matter not for me but for my right hon. Friend the Home Secretary.

Mr. Neubert: Would it not be more precise for the Secretary of State to admit that the time for alibis is over and that our record in the last five years, in comparison with other countries, is abysmal, and that even in January our inflation rate was higher than in any other country in the Common Market? Are not higher prices the inevitable consequence of a Socialist Government?

Mr. Hattersley: The hon. Gentleman struggles to make his little political point. I must repeat the facts of the matter to him. We reduced inflation from over 20 per cent. to little more than 8 per cent.

Sir John Langford-Holt: To 8·4 per cent.

Mr. Hattersley: Exactly, 8·4 per cent. to be precise, if the hon. Gentleman wants

to remind us of that figure. We can maintain inflation at the present level, but one thing that would stop our maintaining it at that level would be the inducing of fear in the British people in general and the trade union movement in particular that since inflation is bound to get out of hand they must make pre-emptive wage demands to compensate for the anticipated rises. So long as the Conservative Opposition continue to pretend that inflation will again take off, I believe that they are making it more likely. We propose to tell the truth about inflation, which is that there is a good prospect of its remaining at or about its present level.

Minimum Lending Rate

Mr. Gow: asked the Secretary of State for Prices and Consumer Protection what recent representations he has received about the increase in minimum lending rate to 14 per cent.; and what effect he expects that increase to have on the index of retail prices.

Mr. Hattersley: None, in both cases.

Mr. Gow: Does not the Secretary of State agree that the very high level of the Government's borrowing is the principal factor in the very high interest rates? Does he not understand that very high interest rates are wholly hostile to any growth in the economy?

Mr. Hattersley: No, the very high interest rates, which I regret as much as the hon. Gentleman, are the result of a combination of factors, some of which are international and some of which are domestic. Having put down his question the moment that MLR went up, I would have hoped that the hon. Gentleman would record his pleasure that it has now gone down again.

Mr. Litterick: Has my right hon. Friend considered referring to the Price Commission the rate of interest offered on the recent issue of Government securities?

Mr. Hartersley: No.

Mr. Nicholas Winterton: Does the Secretary of State accept that high interest rates have a bearing on prices charged by smaller business, the retailer in particular? Therefore, does not he accept that part of the price increases which housewives are experiencing today are a result of the Government's very high


public service borrowing requirement, which in the past has driven up interest rates and MLR? However, I welcome the recent small reduction in MLR.

Mr. Hattersley: Of course increases in lending rates and the cost of borrowing are contributory factors when price increases come about. But the point that I tried to make a moment ago is that we must try to keep a balance over the economy as a whole. We have kept the public sector borrowing requirement firmly in check, we have stuck to our targets with regard to PSBR and our interest rate policy is a contributory factor in those targets being maintained.

Mr. Michael Latham: With regard to local authority borrowing, will the right hon. Gentleman blame the shattering increase in rates which will come next month in many areas of the country—which will be far in excess of the Government's targets—on Lord Barber or on the EEC common agricultural policy?

Mr. Hattersley: Different authorities have different records with regard to rate increases, and different authorties have different—

Mrs. Oppenheim: Labour authorities.

Mr. Hattersley: The hon. Lady cries "Labour authorities". That enables me to make my second point, which is that different authorities also have different records on the provision of services. The cry of "Labour authorities" is appropriate to them as well. As to specific rate increases, the hon. Gentleman must ask the Secretary of State for the Environment, and not me.

Oral Answers to Questions — PUBLIC EXPENDITURE

Mr. Canavan: asked the Chancellor of the Duchy of Lancaster whether, in his role as economic adviser to the Government, he is satisfied with current levels of public expenditure.

The Chancellor of the Duchy of Lancaster (Mr. Harold Lever): All Government decisions, on expenditure as on other matters, have my full support.

Mr. Canavan: Will my right hon. Friend give the House an assurance that the Government will resist the pressures which are coming from Tory hatchet men

and Treasury officials, who are demanding further savage cuts in essential social services in the forthcoming Budget? Does my right hon. Friend agree that an alternative strategy of increasing public expenditure by about £3 billion a year would not only help to improve essential social services but would create jobs?

Mr. Lever: I do not know that there are any hatchet men among the Civil Service, in spite of the one-sided leaks that one reads about. The Government's approach to public expenditure is based on a rather broader vision than that of the Conservative Party. I am afraid that I cannot go along with my hon. Friend in believing that it would be appropriate to procure an immediate £3 billion increase in public expenditure. I am as keen as he is to move away from the grossly excessive levels of unemployment in the Western world, including those in our own country. But I do not think that a simpliste remedy of that kind will produce the results my hon. Friend wishes.

Mr. Budgen: Does the right hon. Gentleman agree that the proposals from the Labour Party to increase public expenditure in the coming year by about £3 billion can only lead to a combination of higher taxes and higher interest rates, or else to an increase in the rate at which the money supply grows?

Mr. Lever: I am not aware of any such proposals from the Labour Party. I am aware that some of my hon. Friends are understandably anxious to increase the public services. I share their desire. It is a question of timing in relation to our economic achievement permitting increases in public expenditure.

Mr. Pavitt: Is my right hon. Friend aware that public expenditure next year in the North-West Thames regional hospital authority area will increase by £1,015 million through no decision of this House but merely by accepting the Common Market directive on nurses? Since that authority is but one of 16 such regions, may I ask my right hon. Friend to give his attention to this matter? If that kind of money is available, would it not be better for the House to decide to give it to the nurses through their pay packets rather than putting it into this scheme?

Mr. Lever: I am afraid that I am not as erudite on the details of this matter


as my hon. Friend. I shall certainly look into the point he raises.

Oral Answers to Questions — MINIMUM LENDING RATE

Mr. Ridley: asked the Chancellor of the Duchy of Lancaster what steps he intends to take to mitigate the effect of 14 per cent. minimum lending rate on small businesses.

Mr. Lever: As the hon. Member is aware, minimum lending rate was reduced last Thursday to 13 per cent. It is not possible to insulate small firms from rises in market rates of interest. I am, however, aware that these rates may sometimes raise special problems for small firms and I shall continue to seek other ways to help them, as we have done in the past year or so.

Mr. Ridley: Although one is pleased at the fall in minimum lending rate, may I ask whether the Chancellor, in his charming way, has yet understood the essential point that high Government spending, particularly on wasteful job creation and job protection schemes, causes the Government to force up interest rates so as to borrow, thereby losing more real jobs in the private sector than they create bogus jobs in the public sector?

Mr. Lever: I think that the rather naive assumptions which the hon. Gentleman invites me to make owe more to party polemics than to a desire to grasp the whole of this complex subject. Our borrowing requirement is firmly held in check. The rates of interest at present, for one reason or another, are higher than they were with the same borrowing requirement. The hon. Gentleman chooses wilfully to ignore a whole complex of factors at home and abroad which bear upon interest rates.

Mr. Litterick: Can my right hon. Friend tell the House how much in interest charges the recent issues of Government securities will cost the taxpayer between now and the end of the century? Does he agree that that borrowing could have been had more cheaply?

Mr. Lever: Without notice I cannot give my hon. Friend the cost in interest charges to the end of the century, or to

any particular time. The present high rates of interest are undoubtedly exceedingly costly. No one will welcome more than I shall any reduction in interest rates on all borrowings which the Chancellor of the Exchequer is able to make.

Sir William Elliott: Does the right hon. Gentleman agree that the high figure which was reached for MLR was reached in a state of panic and was not connected with any sense of reality?

Mr. Lever: I do not know that I find it reassuring that Opposition Members and some of my hon. Friends are achieving identical hallucinations on this delicate area of finance. No one could possibly suggest that that rate of interest was induced by a state of panic. It was a judgment reached after due consideration. The rate was dropped as soon as market conditions made it possible.

Mr. Skinner: Is it not a fact that it has been widely reported that, as a result of minimum lending rate going up to 14 per cent., some of the City friends of the Chancellor of the Duchy have made a killing during that three-week period when the Government were selling gilts in that way? As my right hon. Friend has just raised the question of the PSBR again, may I ask whether he takes into account the fact that it is costing about £4,000 million to finance the dole queue? Is he not aware that that is one of the factors which is creating inflation and leading to this figure of 14 per cent.? It is at that end that he ought to start doing some work.

Mr. Lever: My hon. Friend raises two interesting points. The first relates to the profits made by some people in dealing in gilts. All I can say is that of course some people make profits from time to time dealing in gilts. Otherwise, they would not deal in them. If my hon. Friend were to offer me a gift of either the profits made recently dealing in gilts or the losses that have been made in gilts in recent years, I am afraid that I should have to tell him that the latter would quite dwarf the former.
The second point raised by my hon. Friend is important. The key problem for the Government in a difficult inflationary situation such as we have now is how to prevent the measures taken to


curb inflation from further adding to the public sector borrowing requirement by increasing the unemployed, non-wealth-creating sector of our economy. I share my hon. Friend's anxiety on this score and am anxious that we tackle this problem so as to reduce the PSBR, as well as the human unhappiness and wealth loss which results from this high level of unemployment.

Mr. Gow: asked the Chancellor of the Duchy of Lancaster what recent representations he has received from those living in the Duchy about the increase in minimum lending rate to 14 per cent.; and if he will make a statement.

Mr. Lever: None, Sir; but I am sure that last week's reduction in minimum lending rate to 13 per cent. will be widely welcomed.

Mr. Gow: Will the Chancellor of the Duchy of Lancaster tell the House and those who live in the Duchy what is his assessment of the influence on the minimum lending rate of the Government's present borrowing requirement? Will he do that in the context of what he said a moment ago, namely, that it is desirable to reduce the public sector borrowing requirement below the figure of £8,500 million?

Mr. Lever: I hope that the hon. Member has not quoted me accurately. I made no such assertion about the extent of the borrowing requirement. The Government have made clear that they do not want the borrowing requirement to be inflated and that they intend to keep it firmly under control. The rate of interest that we have reached, in my opinion—since the hon. Gentleman asks for my opinion—does not derive from the size of the Government's borrowing requirement. It derives from a number of other factors too numerous to retail now.

Mr. Wigley: In view of the high level of interest rates and the likelihood that they will remain at this level for a time, is the right hon. Gentleman satisfied that adequate funds are available for industry and in particular small companies which are starting up for the first time? Would it be helpful to have a low-interest fund available to these companies?

Mr. Lever: Availability of funds and the rate of interest are not necessarily the same thing. As the hon. Gentleman

knows, the Welsh Development Agency has done a splendid job in providing funds. COSIRA and other agencies have done well in the United Kingdom generally. There are special difficulties for the smaller firm in finding finance. I shall keep under constant review what might be done to extend the facilities for providing finance for these smaller firms.

Oral Answers to Questions — SCOTLAND (COURTS DISPUTE)

Lord James Douglas-Hamilton: (by private notice) asked the Secretary of State for Scotland, bearing in mind that justice in Scotland has been suspended indefinitely in the Court of Session, the High Court of Justiciary and most sheriff courts as a result of industrial action by clerks of court, whether he will introduce emergency legislation to deal with summary criminal cases and civil cases, for example, actions for personal injuries which may be affected by time-barred prescription.

The Secretary of State for Scotland (Mr. Brace Millan): I regret to say that since 23 February the Court of Session, the High Court of Justiciary and the majority of the sheriff courts have been seriously affected by industrial action taken by members of the Society of Civil and Public Servants and the Civil and Public Services Association.
The Lord President of the Court of Session has made rules of court suspending normal sittings in these courts, except for certain categories of business, and also suspending procedural time limits laid down by the courts. Under the arrangements made, all courts are dealing with very urgent matters, for example, interim interdicts and committals of persons charged with serious offences. Moreover, some sheriff courts are able to deal with other matters.
I recognise that the position is serious and unsatisfactory and, along with my right hon. and learned Friend the Lord Advocate, I am keeping the whole situation under continuing review to see what further measures, including emergency legislation, may be required.

Lord James Douglas-Hamilton: Is the right hon. Gentleman aware that under section 23 of the Summary Jurisdiction (Scotland) Act 1954 all summary criminal


cases must be brought within six months? If the right hon. Gentleman does not introduce emergency legislation, many persons who are charged with crimes in Scotland will have cause for great rejoicing. They may never appear in court. That is most unsatisfactory for the rule of law.

Mr. Millan: The Acts of Adjournal deal with these and similar matters. We are containing the present situation, but I have not ruled out legislation.

Mr. Dalyell: I recognise the delicate situation in the courts, but how long does the suspension of time limits last?

Mr. Millan: I do not think that a limit has been imposed. We have suspended the sittings so that the time limits do not apply.

Mr. Henderson: Following that new version of the West Lothian question, will the Secretary of State consider civil as well as criminal cases? People may be time-barred from bringing an action if it is not launched within a specific period. Is the Secretary of State satisfied that there are sufficient arrangements to protect people's rights?

Mr. Millan: For normal cases the Acts of Sederunt that have been made by the Lord President of the Court of Session deal with the immediate situation. I appreciate that a number of cases may become time-barred and require legislation. If legislation were introduced, it would have to be retrospective, so that no one would fall outside such powers.

Mr. Monro: The Secretary of State does not appreciate the seriousness of the situation. Law and order have ceased to function in Scotland. Will the right hon. Gentleman introduce legislation this week? He has given no indication of the time scale. The matter should not be allowed to drift on week by week.

Mr. Millan: I have no intention of allowing matters to drift on, but I do not think that I shall be able to introduce legislation this week.

Mr. Failbairn: Does the Secretary of State appreciate that fundamental constitutional rights are being denied to the citizens of Scotland? It is nonsense to say that the Acts of Adjournal deal with statutory summary rights. Only emergency legislation by the Government can do that. It is a most serious constitutional matter. Does the Secretary of State also

appreciate that I wrote to the Prime Minister on 26 February asking him to take it up at that level? I have not even had the civility of a reply.

Mr. Millan: What I said previously applies. If there are gaps that require to be dealt with by legislation rather than by further Acts of Adjournal, I shall consider them. I wish to ensure that no one charged with a criminal offence slips through the net because of the present situation.

Mr. Teddy Taylor: Does the Secretary of State agree that the disruption of courts and of justice in Scotland is of the utmost constitutional gravity? Will he give a clear assurance that there is no possibility of an accused person being released and not being brought to trial? Secondly, when will there be emergency legislation? Thirdly, what steps are being taken to resolve this desperately serious situation?

Mr. Millan: I am open to suggestions on the hon. Gentleman's last point, but so far there have been none. The situation in the courts is part of a larger dispute involving two of the Civil Service unions. I do not know whether the hon. Gentleman is suggesting that we should simply give in to the demands of the unions. I hope not.
I can give the assurance on the general position that the hon. Gentleman asked for. He will appreciate that that is dependent on a number of petitions that my right hon. and learned Friend the Lord Advocate has made to the courts in Scotland. I assume that if further petitions are necessary these will come forward, and I must assume that the courts will grant them. But these are individual cases to be decided by the courts rather than the Government.

Mr. Taylor: In the absence of a settlement, when will emergency legislation be required?

Mr. Millan: I said that I was keeping that question under continuing review. I am not prepared to give a time for emergency legislation, should that prove necessary.

Oral Answers to Questions — NEW MEMBERS

The following Members took and subscribed the Oath:

David Charles Waddington Esq., for Clitheroe.

John Bruce-Gardyne Esq., for Knutsford.

Oral Answers to Questions — NATIONAL UNION OF JOURNALISTS

Sir John Eden: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
 the decision by the National Union of Journalists to expel several hundred of its members employed in provincial newspapers who refused to go on strike; and the serious implications of that decision for the employment prospects of the journalists concerned, as well as for the freedom of the press.
Recently the NUJ called a strike among its members employed by provincial newspapers. No ballot of the membership had been taken, and in a number of places separate local pay increases had already been negotiated. The concurrent national agreement still had some time to run. Several hundred journalists refused to strike, and continued at work. These included journalists employed on the Bournemouth Evening Echo and its associated newspapers in other parts of the South.
After the strike the union set up its own investigative procedures and "tried" its members who had refused to strike. This "flying assize", as it was called, caused widespread concern, and a number of us tabled early-day motion No. 231 criticising what had been done. Journalists who had refused to strike expected some retribution, in the form either of a fine or of the temporary suspension of their membership. But the union has gone much further. As one leading journalist in my constituency put it "The union has gone crazy. It is destroying a complete branch." In fact, last Wednesday 33 journalists on the Bournemouth Evening Echo were told that they were to be expelled from the NUJ. The same harsh treatment has been meted out to others in Weymouth, Southampton, Birmingham, Nottingham and elsewhere.
This is a very serious matter. It will have the most damaging effect on the career prospects of the journalists concerned. It will debar them from employment where there is a closed shop agreement in favour of the NUJ, and that covers most of Fleet Street, the provincial press and broadcasting. This is going to an extreme. The punishment is excessively

severe and I hope that the union will think again.
The union action also carries grave implications for the freedom of the press. There are those, including the present Leader of the House, who have tried to establish the NUJ as the sole union to be recognised in journalism. Let us hope that that day never comes.
Even as things are, the power to deprive a journalist of his or her livelihood provides immense opportunity for coercion in a wider field. What is now being done in support of a union diktat in the furtherance of a pay claim could so easily become a weapon for regulating the nature and content of material to be published. That must cause deep anxiety in this House and it should be the subject of our most urgent consideration.

Mr. English: On a point of order, Mr. Speaker—

Mr. Speaker: Order. There can be no point of order until I have answered the right hon. Gentleman.

Mr. English: But you may be answering him under a misapprehension, Mr. Speaker—

Mr. Speaker: Order. I take the words of hon. Members as they come. I shall give my ruling accordingly. If the hon. Member for Nottingham, West (Mr. English) wants to raise this matter afterwards, of course I shall listen to him.
The right hon. Member for Bournemouth, West (Sir J. Eden) asked leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
 the decision by the National Union of Journalists to expel several hundred of its members employed in provincial newspapers who refused to go on strike, and the serious implications of that decision for the employment prospects of the journalists concerned, as well as for the freedom of the press.
I listened with anxious care to the right hon. Gentleman. The House knows that, however important the matter, it is not for me to decide whether it should be debated; I merely decide whether there shall be an emergency debate.
As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the


Order but to give no reasons for my decision. After listening very carefully to the right hon. Gentleman, I have to rule that his submission does not fall within the provisions of the Standing Order, and therefore I cannot submit his application to the House.

Mr. English: On a point of order, Mr. Speaker. I am grateful to you. I am not competent to say what has happened in Bournemouth, but I believe that the right hon. Member may have unwittingly misled the House as to what happened in Nottingham—

Mr. Speaker: Order. We cannot have an argument about facts now. If there is a point of order that I can deal with, I shall do so. Otherwise, there is no point in pursuing this matter.

Mr. English: I would have thought, Mr. Speaker, that fact was important in this context. If six members of the NUJ are being threatened with eviction from their houses by their employers, as has occurred in Nottingham, that should be mentioned here as well—

Mr. Speaker: Order. Perhaps the hon. Member would like to make his own Standing Order application.

Several Hon. Members: rose—

Mr. Speaker: Order. I am not taking further points of order on a ruling that I have already given.

Oral Answers to Questions — EMPLOYMENT PROJECTS (TREASURY MEMORANDUM)

Mr. Gow: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
 the prospective loss of £800 million involved in the Government's so-called job saving projects, disclosed in a memorandum from the permanent secretary to the Treasury addressed to the permanent secretary to the Department of Industry, and described in The Guardian newspaper of 28 February 1979.
Last Wednesday The Guardian disclosed the contents of a memorandum from the permanent secretary to the Treasury which showed that over the four

months ended December 1978 the Government initiated seven job-saving projects involving the country in losses of up to £800 million.
I must satisfy you, Mr. Speaker, that this matter is specific, and I shall deal first with the specific nature of the projects. I take first the Rolls-Royce project, which the memorandum states is inherently risky and, even on an optimistic assumption, could not be expected to break even until 1993.
My second instance is the British Aerospace 146 project, in which launching costs are expected to be between £250 million and £300 million, with a loss to the country of between £90 million and £210 million.
The third specific matter to which I draw attention is the airbus project, in respect of which it is stated that there will be a negative cash flow of £300 million by 1983, and a loss, on today's prices, of £110 million.
I turn to the importance of the matter. Sir Douglas Wass included in his memorandum the following statement:
 We seem bent on, or have decided on, going ahead with projects which seem likely to waste economic resources.
I believe that there is no more important matter for this House to discuss than the question of the control of Parliament over the expenditure of public money.
The third criterion relates to urgency. There was a suggestion—I believe it to be well founded—that these projects had been initiated during the four months ended 31 December 1978 because it was widely assumed that during that period a general election might fall. It is now even more likely that we shall have an early general election. Unless this House debates this matter urgently, who knows what the Government Front Bench will get up to in trying to buy votes at the next general election?
I consider that this submission fulfils all three criteria. It is specific, it is important, and it is urgent that the House should debate the matter.

Mr. Speaker: The hon. Member gave me notice before noon today that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter


that he believes should have urgent consideration, namely,
 the prospective loss of £800 million involved in the Government's so-called job saving projects, disclosed in a memorandum from the permanent secretary to the Treasury addressed to the permanent secretary to the Department of Industry, and described in The Guardian newspaper of 28 February 1979.
As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the Order but to give no reasons for my decision. I have given careful consideration to the representation which the hon. Gentleman has made, but I have to rule that his submission does not fall within the provisions of the Standing Order. I therefore cannot submit his application to the House.

Mr. James Lamond: On a point of order, Mr. Speaker. Is it causing you any concern that a practice seems to be growing up of Opposition Members raising Standing Order No. 9 applications with the purpose of making speeches about matters which have appeared in the press recently on which they know they would not otherwise be able to speak? We have just heard an Opposition Member make reference during what was supposed to be an impartial submission to the Government's buying votes and to the Government's so-called job creation programme.
I should like to suggest to you, Mr. Speaker, that you examine the speeches being made by Opposition Members in support of Standing Order No. 9 applications to see whether those Members are keeping strictly within the Standing Orders of the House.

Mr. Madden: rose>—

Mr. Speaker: I shall hear the hon. Gentleman before I comment on the point of order.

Mr. Madden: Adding to what my hon. Friend the Member for Oldham, East (Mr. Lamond) has said, I am sure, Mr. Speaker, that you will agree that over recent weeks we have heard a large number of applications under Standing Order No. 9. I am sure that the House would be grateful for a reminder from you, which you have given from time to time but which seems to have been overlooked recently, that the main objec-

tive of such applications is to advance arguments why a debate should be granted rather than to advance the substance of matters which would be heard in such a debate.
A number of hon. Members are placed in great difficulty. The right hon. Member for Bournemouth, West (Sir J. Eden) made reference today to a situation existing in many parts of the country, and my hon. Friend the Member for Nottingham, West (Mr. English) clearly took exception to some remarks made about his own constituency. We are denied an opportunity of refuting inaccurate statements which may be made about our constituencies if applications are made as widely as they have been today.

Mr. Speaker: The hon. Gentleman, if he were advancing an application for an emergency debate, would be one of the first Members who would wish to state the facts on which he based his application. It is within the power of the House to change its rules. There is a long-standing report waiting for discussion by the House which deals with this very question of Standing Order No. 9. Until the House changes its rules, I am under instructions to fulfil the rules that exist.

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): Further to that point of order, Mr. Speaker. It is perfectly true, as you suggest, that there is a report which, if carried into effect, would deny the House altogether the possibility of raising Standing Order No. 9 applications at the present time in its proceedings. This is, of course, a matter for debate by the House. Some hon. Members might think that such a proposal, if implemented, would deprive Back Bench Members of their rights. Some might wish to resist it on that score. Whether hon. Members are trespassing so far as to breach the normal manner in which they can raise these matters is a different question altogether.

Oral Answers to Questions — BILL PRESENTED

OUTLAWRIES (NO. 2)

Mr. Ronald Bell, supported by Mr. J. Enoch Powell, Mr. Julian Amery, Mr. Hugh Fraser, Mr. John Biggs-Davison and Mr. Patrick Wall, presented a Bill to


vary the application of section 2 of the Southern Rhodesia Act 1965; to clarify the meaning of section 2 of the Immigration Act 1971; and for the better prevention of clandestine outlawries: And the same was read the First time; and ordered to be read a Second time upon Friday 30 March and to be printed [Bill 99].

Oral Answers to Questions — ARBITRATION BILL [Lords]

Ordered,

That the Arbitration Bill [Lords] be referred to a Second Reading Committee.—[Mr. Thomas Cox.]

Oral Answers to Questions — CONSENTS TO PROSECUTIONS BILL

Ordered,

That the Consents to Prosecutions Bill be referred to a Second Reading Committee.—[Mr. Thomas Cox.]

HOVERCRAFT (CIVIL LIABILITY)

10.18 p.m.

The Under-Secretary of State for Trade (Mr. Clinton Davis): I beg to move,
That the draft Hovercraft (Civil Liability) Order 1979, which was laid before this House on 19 February, be approved.
Although this order is intended to replace the Hovercraft (Civil Liability) Order 1971, the changes which it makes to the provisions of that earlier order are relatively few and restricted in scope. But, because of the necessarily complex and lengthy nature of the 1971 order and the many detailed amendments which are in consequence required to it, a completely new order has been prepared in the interests of convenience and clarity.
As hon. Members may know, the purpose of the 1971 order, which, like the present order, was made under section 1 of the Hovercraft Act 1968, was to establish the nature and extent of civil liability in respect of the carriage of cargo, passengers and baggage by hovercraft and in respect of third party liability arising in relation to hovercraft.
Thus, the 1968 Act and the 1971 order make provision, first, for a modified version of the Carriage by Air Act 1961 and the Carriage by Air (Supplementary Provisions) Act 1962 to apply to liability in the carriage of passengers and their baggage by hovercraft; secondly, for a modified version of the Carriage of Goods by Sea Act 1924 to apply to liability for cargo carried by hovercraft; and, thirdly, for a modification of part VIII of the Merchant Shipping Act 1894, as amended, to apply to a hovercraft owner's or operator's overall liability for causing personal injury or death or property loss or damage.
In the past eight years there have been two main developments that make amendments to the 1971 order desirable, though without changing the general approach adopted by that instrument. First, inflation and the revised limits of liability that apply under the original maritime or aviation statutes make the various limits of liability established by the 1971 order too low and out of date. Secondly, new legislation that has come into force since 1971 needs to be taken into account.
I shall briefly explain the main changes made by the new order. The 1971 order applied to hovercraft the liability for passenger rules of international carriage by air, but with a standard per capita limit of liability for death or personal injury of £12,000. That was because at the time ship owners were able to exclude contractually all liability towards passengers—a situation which it was not thought should apply in relation to hovercraft.
The £12,000 limit did not, however, derive from the aviation example. It was merely a figure which was considered at the time to be fair to hovercraft operators and passengers alike. The new order simply increases that limit to £30,000 to compensate for inflation since 1971. It is perhaps relevant to note that, as a result of the Unfair Contract Terms Act, ship owners can no longer contract out of all liability to passengers, though they are allowed to limit it to slightly more than £30,000 per capita.
The increase made by the new order will also effectively implement the immediate recommendation on hovercraft limits of liability of the Royal Commission on civil liability and compensation for personal injury—the Pearson Commission. That is the situation on international carriage, but it is different in relation to domestic carriage, for which the order does not introduce the higher limit suggested by the Pearson Commission.
For the longer term, the Commission envisaged the application of the limit in the Warsaw Convention as it will be amended by Montreal Protocol No. 3. The Commission assumed that air law should remain the basis of the carriage of passengers by hovercraft—an assumption which is open to considerable doubt. The legal committee of IMCO may shortly consider a preliminary text of a draft international agreement relating to the carriage of passengers and their baggage by hovercraft which is based on the provisions of a new convention on ship owner's liability for the death of or injury to passengers, namely, the 1974 Athens Convention. It would seem sensible not to prejudice our possible future application of the draft international agreement if, after consideration by the IMCO legal committee, it remains based on maritime law. I hope that the House
will feel that that is an appropriate course.
Two amendments are made to the provisions of the 1971 order in respect of liability for passengers' baggage. The limitations for baggage in the 1971 order were identical to those applying in the United Kingdom to air transport, namely, £138 per passenger for baggage in the passenger's charge and £7 per kilogram for registered baggage. Those limits have since increased by about 50 per cent. while the limits for hovercraft under the 1971 order have remained unchanged. In addition, doubts have been expressed since 1971 about whether the air law distinction between registered baggage and baggage in the charge of a passenger is applicable to hovercraft where items handed over by the passenger on embarkation are not normally weighed.
To deal with those two matters, the new order increases the hovercraft limit of liability for baggage in the charge of a passenger to £216, so that it again accords with that applicable in carriage by air and establishes a separate and additional limit of £216 for other baggage, replacing that which now applies to registered baggage.
I turn now to cargo liability. The rules in the 1971 order for goods on board a hovercraft were based on the Carriage of Goods by Sea Act 1924. That Act implemented in the United Kingdom an international maritime agreement on the subject known as the 1924 Hague Rules. However, in June 1977 the 1924 Act was superseded by the bringing into force of the Carriage of Goods by Sea Act 1971, which gives effect to a protocol to the 1924 Hague Rules. It is therefore only sensible that the 1971 order should now be amended to reflect the changes that have resulted from the Carriage of Goods by Sea Act 1971 entering into force.
Finally, there is global limitation, the overall ceiling on liability in respect of all claims which may arise from an incident, although under both the 1971 order and this new order that overall liability limit does not include claims in respect of death or injury to passengers on board the hovercraft itself, or for loss of or damage to their baggage. But the global limitation figures which apply

to ship owners, and upon which the corresponding 1971 hovercraft limits were based, have increased by over 50 per cent. since 1971. This order simply increases the hovercraft limits in the same proportion.
I hope that the House will approve the order, which does not depart from the principles established in the 1971 order but merely brings that order up to date in certain limited respects. In so doing, I particularly emphasise and commend to the House the substantially increased protection that the new order will accord to hovercraft passengers.

10.26 p.m.

Mr. David Hunt (Wirral): Although the order is a technical provision, it is very important. It gives the House an opportunity to look at hovercraft travel over the period since the previous order was made. Looking back over the past 10 years, one sees that the number of passengers and the number of cars carried by hovercraft have greatly increased. Whereas 10 years ago Hoverlloyd carried 36,000 cars annually, it now carries a quarter of a million. Compared with the 300,000 passengers it carried 10 years ago, it now carries 1¼ million every year. Sea-speed carries about three-quarters of those numbers of cars and passengers.
I believe that what has happened over those years has justified the original decision to treat the hovercraft as a vehicle sui generis and to apply each rule, order and provision relating to ships, aircraft or motor vehicles only if it is applicable.
However, other countries have not been so far-sighted. France, for example, has sought to treat the hovercraft as a ship, and in doing so has encountered a great deal of difficulty. Although we are not dealing with that subject tonight, one example of the problems lies with the French treatment of port and harbour dues according to tonnage, which is causing our operators some problems.
The order is a very important measure, dealing as it does with civil liability. I take issue with the Minister over the amount of consultation that has taken place. I understand that the main operators have been consulted, but they have expressed some concern to me—I cite Hoverlloyd in particular—about the lack of any response to the consultation. Hoverlloyd has shown me a letter that


it wrote to the Department of Trade on 12 May 1978 making a number of very important points about the draft, not one of which appears to have changed the draft. It received no communication in reply. It would be helpful if the Minister could indicate that the points raised by Hoverlloyd and Seaspeed will be dealt with in correspondence.
Having made the right decision, so that since 12 July 1972 a hovercraft has not been treated as a ship, motor vehicle or aircraft, but as an air-cushion vehicle, we must get the balance right. As the Minister has explained, the order is based on the practice of using the Carriage by Air Acts for liability for carriage of passengers and baggage and the Carriage of Goods by Sea Act for liability for carriage of cargo.
Under the order, there are to be substantial increases in liability for hovercraft operators. This is perhaps an appropriate moment to point out something that the Minister did not mention, namely, that as well as applying the different principles of liability in the amounts involved, doing it in this way introduces differing principles of liability.
Kovats, who has written what is described as the bible on the law of hovercraft, points out the difficulties of doing it in this way. I wonder whether the Minister is wedded totally to the principle, or whether he is still considering it. Kovats says:
 By introducing the concept of wilful misconduct (which is based on intentional wrongdoing) from air law, while leaving unaffected the rules relating to negligence (which are based on reasonableness) and limitation of liability (which are based on fault and privity) applied in maritime cases, the legal analysis of a single act or omission on the part of one and the same person "—
albeit in respect of differing liabilities—
 will pose innumerable difficulties to all whose task will be to fix the incident of liability where it should lay.
That is very important, of course.
Returning to the amounts involved, I wish to put three matters to the Minister. First, while I recognise that in 1971 the limit of liability for injury to or death of passengers was fixed at £12,000 and therefore, of course, there must be a review, in my view the increase to £30,000 is very substantial. Despite the Government's mismanagement of the economy.

that is not related wholly to inflation. It represents a positive increase. Operators believe that it will place them at a competitive disadvantage with ship owners.
Under SI No 1468 of 1978 ship owners may limit liability to £30,390·8, but they have the benefit of an overall limitation of liability. I refer to representations which have been made by the British Hovercraft Corporation Ltd.—and I had the opportunity of speaking today to Mr. Stanton-Jones, the managing director. It believes that the lack of an equivalent overall limitation of liability places the hovercraft operator at a considerable disadvantage. In putting his case, Mr. Stanton-Jones included the existing limit, which is £130 per gross ton of the ship involved. He gave an example of an N4 mark 2 hovercraft with 280 passengers and 30 cars, where the limit of liability under this order and its new provisions will be £8· 5 million, whereas a typical cross8· Channel ferry with a gross weight of 2,400 tons carrying 1,200 passengers and 155 cars will have a maximum liability of £310,000. At first sight, unless the Minister can explain why he wants this order to come into force on 1 April, that would seem to be a very serious disadvantage.
Even if the London Convention 1976 is ratified in relation to ships, a ship owner will still have an overall limit of approximately £17 million. As the Minister knows, we have been discussing the London Convention in our debates in Committee on the Merchant Shipping Bill. But even though it reaches that limit, there are still competitive disadvantages.
It was as long ago as 28 November 1977 that Hoverlloyd put a case to the Department, and it has not had a response to its case as yet. It cited as an example the motor vessel "Earl Siward", which is in regular service on the short sea route, with a gross tonnage of 3,602 and a net registered tonnage of 1,217. The approximate global limitation for total liability for that vessel would be £230,000, whereas even on the present liability figure of £12,000 for hovercraft passengers, where there is no overall liability limitation, a hovercraft has to carry only 20 people before its total liability is greater than that of a ship the size of the "Earl Siward". I should be grateful


if the Minister would respond to the very serious contentions put forward by Hoverlloyd and the industry. Assuming a cross8· Channel ship to have a capacity of 1,000 passengers, even under the London Convention 1976 the per capita limit will be £17,000, whereas he is proposing a figure of £30,000 for hovercraft operators.
The Minister mentioned the Pearson Commission report. That Commission suggested that there should be a two8· tier system of liability, with a separate limit of £37,700 for journeys within the United Kingdom. That met with hostility from the industry, and it will be helpful if the Minister will confirm that he has rejected that approach, that so far as he is concerned he will stay with the £30,000 limit for all journeys and that no reconsideration in the light of Pearson is continuing at the present time.
The third point relates to baggage. Again, this will place the hovercraft operator at a disadvantage compared with airlines because it assumes that, with a limit of £216 per item of registered luggage, each item weighs 20 kilograms. But that is totally inaccurate, as Hoverlloyd's research shows that the average weight per item is 10 kilograms. Why is there difficulty in determining the difference between hand baggage and registered baggage? This is a point that concerns the industry. Can the Minister explain why he cannot simply define registered baggage as that which has been handed into the care of the operator? I know that there is no checking8· in, as there is with an airline, but baggage is handed into the custody of the operator. Surely that gives a reason why a particular definition can be taken in that context.
I should like to raise a further point in relation to cars. Under article 5 (b)
 a vehicle and its contents shall not be treated as baggage ".
I know that Seaspeed—British Rail Hovercraft Ltd.—has put forward a contention to the Minister that it believes his Department has missed an opportunity to rectify an anomaly over liability for motor cars. Ship ferries are governed by the Athens Convention, which lays down a limit of liability for cars of £2,170. This order clearly states that cars are not baggage, but it does nothing to lay down a limit for operator's liability. Perhaps the

Minister will confirm that as a vehicle and its contents will not be treated as baggage they immediately fall into the cargo definition.
If that is the case, one then looks at the Carriage of Goods by Sea Act and sees that it operates by reference to a bill of lading. A bill of lading in relation to hovercraft operation does not have any relevance. A passenger does not negotiate a bill of lading with the hovercraft operator, yet if the operator wishes to incorporate the provisions of the Carriage of Goods by Sea Act he has to have a bill of lading or something equivalent. Perhaps the Minister will explain whether he is reconsidering the application of the Carriage of Goods by Sea Act in that context, because on the one hand he is making a substantial addition to the definition of cargo by treating all vehicles and their contents as cargo. But he is not, on the other hand, making the task any easier for the hovercraft operator by simplifying the definition and, indeed, the relevance of the Carriage of Goods by Sea Act.
The Minister referred to the IMCO Convention. As I understand the position, hovercraft were excluded from the Athens Convention in 1974 by a United Kingdom initiative, because the International Institute for the Unification of Private Law was studying a separate convention. I presume that this must be the draft convention to which the Minister referred, which is shortly to be discussed through IMCO.
As I understand it, that convention brings in a new definition, namely, "luggage", which would obviously require some reconsideration of the provisions of this order. I wonder whether the Minister could explain how he intends to consult the industry over this IMCO convention. Will he do it just through the hovercraft committee of the Air Regulation Board or does he propose to initiate a series of discussions with the operators and other interested bodies? The interested bodies, for instance the United Kingdom Hovercraft Society, would probably have some valuable contributions to make to the IMCO deliberations.
Seaspeed makes the point, which I understand it made to the Department, that we have a new Merchant Shipping Bill and that there is a new carriage by air and road Bill on the stocks. There


are obviously things in both those Bills which will affect hovercraft liability, and therefore this order will surely have to be amended before it has been in existence for long. Seaspeed has felt strongly that it would have been better to have those two Bills out of the way before making the order effective. As it is eight years since the previous order was made it would not, in its opinion, have been wrong to have waited a bit longer.
The United Kingdom Hovercraft Society has also posed the question, which rather summarises my remarks: what are the different limits of liability for hovercraft, aircraft, ships and hydrofoils? We seem to be setting up a regime where there are different limits of liability for each of these vessels and craft, which adds to the complexity of existing law, particularly for passengers. What consideration is being given to reaching a unified approach on these issues? It would be helpful if the Minister could—if not now, in a letter, so that I can pass it to the various bodies which have been in touch with me—give an analysis of the differing limits of liability so that representations can be made on them.
Many of my points tonight have referred to the urgency to get the balance right when trying to incorporate these different regimes. We are talking more about the level of insurance premiums than anything else, because we must be aware of the industry's safety record. But insurance premiums contribute substantially to the competitive structure within which hovercraft operate. We have every right to be proud of the achievements of the United Kingdom in the manufacture and operation of hovercraft. We must ensure that we do not impose an unfair burden on this important sector.

10.43 p.m.

Mr. Stephen Ross: I begin my speech where the hon. Member for Wirral (Mr. Hunt) ended. I congratulate the hon. Member on his research. He has become knowledgeable in an area in which I did not know he was expert. I at once confess that I know very little about the subject. I am concerned because the British Hovercraft Corporation Ltd. employs 2,200 of my constituents and is, therefore, the largest employer of labour on the Isle of Wight,

with the exception, I am afraid, of the Isle of Wight county council, which I suppose we have to expect.
As the hon. Member for Wirral has rightly pointed out, the hovercraft has a marvellous safety record. I can think of only one fatal accident, which occurred off Ryde in rough weather. That accident was a tragedy which never should have happened. There may well have been another occurrence, but I cannot think of it.
I feel that this British technical invention has not had enough support from the Government. The hovercraft in which I travel across the Solent—and I know of only those two routes, plus the cross-Channel routes, which are operated regularly in this country—were built 10 or more years ago. Even the SRN 4, the Earl Mountbatten of Burma class, which operates from the constituency of the hon. and learned Member for Dover and Deal (Mr. Rees), is a stretched craft. It was originally built in the late 1960s and has had the middle chopped out and an extra bit put in. It is a great success and we in the Isle of Wight are thrilled with it. We are doing the second one for Seaspeed. But the fact is that we ought to have developed much further. We should be in the next stage of these craft, where they would be competitive with merchant shipping. We demonstrated that in the House some two or three years ago.
New opportunities are opening up in Alaska and China. My constituents and the managing director of the British Hovercraft Corporation Ltd. are somewhat incensed that when the Chinese are over here they seem to be directed to subsidiaries of British Shipbuilders—nationalised companies—and Vosper Thorneycroft in particular, which is a real tiddler in the production of hovercraft—while BHC is generally left out of the picture, although now I gather that it is back in it. But as it is the manufacturer of virtually every craft, except for the French craft which are operating across the Channel, it is nonsensical not to give it every opportunity to get in on the area of operation now opening up in China. I have a feeling that hovercraft will be of use to China, and I am pleased also that in Alaska the Jones Act, which had the effect of stopping operations in


Alaska, has been conceded for five years. That allows British operators to get into the Alaskan market, too.
I am concerned that this order will put hovercraft at a grave disadvantage in comparison with ships. At a time when they are struggling to continue to keep ahead, this additional blow may persuade some of the operators—there are only three that I know of in this country, Hoverlloyd, Seaspeed and Hover Travel, which is based in my constituency—that it is no longer a viable possibility to continue to operate.
I have confirmation of some of the figures quoted by the hon. Member for Wirral. Under the Merchant Shipping Bill, some of the liability for cover for merchant ships is being substantially increased. If the figures given to us by the managing director of British Hovercraft are correct, it seems to me that the company is being put at a considerable disadvantage. Is this necessary in view of the very limited operations of these craft? Their operations have not expanded at anything like the rate which we would have expected. They have not had anything like the encouragement that they should have had. We are passing a very lengthy document here for a very small number of hovercraft operating in this country. Is it really necessary to land them with such heavy overheads?

10.48 p.m.

Mr. Clinton Davis: The hon. Member for Wirral (Mr. Hunt) asked me about consultations. My understanding of the situation was that all the points that had been raised by the hovercraft operators were fully considered. Indeed, a copy of the draft order was submitted to them last week, and my understanding was that the points they had raised were substantialy covered in this order as we are now considering it. If they wish to raise any specific matters, of course I shall deal with them by way of correspondence, but, to the best of my recollection, they have not written to me about the situation. I shall certainly consider what the hon. Gentleman has said, and perhaps the hovercraft operators will do likewise if they wish to raise any particular matters beyond those which have been canvassed in the House.
The hon. Member for Wirral asked whether we would be considering longer-

range changes in the concept of liability. I indicated in opening the debate that the order did not dramatically affect the situation. It is merely a reflection of developments since the 1971 order and is, therefore, limited. Longer-term thinking should be undertaken in the light of the changing international scene, not least the current deliberations in the IMCO legal committee—to which I referred earlier. It would be premature to embark on a substantial change prior to the conclusion of those deliberations, and it is unlikely that IMCO will come forward with a convention for some years. It is impossible to predict how long that will take.
The hon. Member for Wirral thought, as did the hon. Member for Isle of Wight (Mr. Ross), that hovercraft operators would be prejudiced by the changes in relation to operators of ships and, to some extent, aircraft. But perhaps we should consider the comparison with ships rather than aircraft. The British Insurance Association has examined this from an insurance point of view. Its advice is that, even with the increase from £12,000 to £30,000 per passenger, the resultant increased insurance premiums will probably only have a slight effect on fares. The grave disadvantages which the hon. Member for Isle of Wight mentioned are confuted by that assertion.
The hon. Member for Wirral asked about the non-application of the global limitation to hovercraft passenger claims. A difference will exist under the new order, but that is so under the 1971 order and is nothing new. That order was made at a time when ship owners were able contractually to exclude all liability towards passengers. Exclusion of passenger claims from a hovercraft operator's global liability, however, continues to be desirable to ensure that compensation available to passengers is not significantly reduced by other claims. The present position of ship owners being able to include passenger claims within their ordinary global limitation amounts will end once the 1976 London Convention comes into force.
The hon. Member for Wirral went on to question the basis of the rules whereby a comparison is made with ships. The measurement rules by which a ship's tonnage is assessed cannot easily be applied to hovercraft. The global limitation calculation for hovercraft is derived from a


comparison of the values of ships and hovercraft. That was the subject of detailed study before the making of the 1971 order. The new order does not change that.
I thought that I had made the position on the Pearson Commission quite clear. The Government are not taking up the matter of the rules relating to liability in the domestic regime.
The question of cars has been raised. The new order does not change the treatment of vehicles at all. It specifies that vehicles and their contents are not to be treated as passengers' baggage. On the other hand, if a vehicle were carried under a bill of lading or some similar document the cargo liability provisions of the order would apply. Otherwise, any contract for the carriage of a vehicle by hovercraft would be subject to the general rules of law, and loss or damage to the overall limitation provisions of the order. Any alteration in this can properly await the more fundamental review of the whole of the hovercraft civil liability provisions, and it would be premature to embark upon that now.

Mr. Peter Rees: This is obviously a matter of concern for those operating from my constituency. Is the Minister indicating that a major review will be undertaken by his Department? If so, when, and when is it likely to report? Also, what will be the terms of reference?

Mr. Davis: The major review is in the hands of IMCO initially. I was asked earlier about the nature of the consultations that will flow from that. It is far too early to judge how we would want to go about consulting. This is a matter that will probably take place in 1981 or thereabouts. It would be wrong for me to enter into any commitments now. Although some criticism has been made of the adequacy of consultation in this case—and I shall investigate that because that was not my understanding—it is the Department's general policy to consult widely. Should there be occasions when deficiencies have occurred in this respect, I shall do my best to ensure that they are put right. I am sure that my officials will have noted very carefully what has been said in the House tonight.
On the question of differing limits of liability, it would be useful to have these

set out in writing because there is a measure of confusion. This matter will be put right only when the fundamental review has been carried out. I shall certainly write to the hon. Member for Wirral. I cannot give him a time scale for this because the matter may need a certain amount of research, but I shall try to do it as soon as possible. I agree that this is a little bewildering on occasions.
I share the views expressed by the hon. Member for Isle of Wight about the very remarkable record, not simply in terms of safety but in terms of initiative and enterprise, that has resulted from the development of the hovercraft in this country. It is a superlative example of ingenuity. Whether we have made the best use of it is a matter that goes far wider than the terms of tonight's debate.
All I can say about the Chinese interest is that I am not a Trade Minister as such, but I shall draw this matter to the attention of my ministerial colleagues in my Department and the Department of Industry. I should be very surprised if every attempt had not been made to interest people overseas in this product. I gather that if there has been any sort of oversight here, it has all been put right and that the Chinese may be as interested in this as they are in certain other matters.

Question put and agreed to.

Resolved,

That the draft Hovercraft (Civil Liability) Order 1979, which was laid before this House on 19 February, be approved.

HOSPITALS (MIXED SEX WARDS)

Motion made, and Question proposed, That this House do now adjourn.—[Mrs. Ann Taylor.]

Mr. David Atkinson: I am pleased to have the opportunity to raise a matter which has caused considerable concern to many people, namely, the problem of mixed wards in hospitals.
This may not be the most appropriate time for such a subject to be raised when there are over-long hospital waiting lists further aggravated by industrial action by hospital staff. One could argue that patients should count themselves fortunate to be offered any bed in any ward at this


time. Nevertheless, there is growing evidence to suggest that the trend towards mixing the sexes in hospitals is taking place today at a speed and in a manner which is not wholly acceptable to the public, as the Minister will know from his own correspondence and from reports which he will have received from community health councils throughout the country.
I am aware that the practice of mixing the sexes in hospitals is not new. It applies to many, if not most, of our hospitals. Some good reasons exist for it. I do not object to them in principle. Mixed wards offer a more flexible system of management of hospital accommodation and a more efficient use of our resources, manpower and equipment, particularly with regard to intensive care units where patients are far too ill to be concerned about the company they are keeping. I agree that positive therapeutic advantages exist as a result of the socialising that it encourages, which helps to stimulate morale and thus provides for a more rapid recovery. In hospitals for the mentally ill, in particular, it provides a positive aid to rehabilitation.
The fundamental point is that entry into such a ward must remain for all time a matter of personal choice. That must be the prime criterion. There exists today worrying evidence that this is not always being applied. There is a real and growing fear and outrage that the proliferation of mixed wards will, in due course, eliminate any margin of personal choice.
Moreover, there are reports, which I believe the House cannot ignore, that, where sexes are mixed, in some hospitals conditions are being experienced and standards are being applied which constitute an affront to human dignity and which cannot be tolerated. Such a situation deserves the fullest investigation and consultation with area health authorities and, through them, the general public before we can allow the trend towards more mixed sex wards in our hospitals to continue.
Last October my local community health council in East Dorset received and discussed a paper on this matter which referred to the fact that
 Mixed units and wards are being introduced into specialties such as orthopaedics and geriatrics, where it is unacceptable for a num-

ber of reasons. Firstly, there is no preadmission warning that patients will be entering a mixed ward or unit. Secondly, there is no choice for patients between mixed and non-mixed wards. Thirdly, some patients experience acute embarrassment performing toilet procedures in mixed wards. Fourthly, geriatric patients are expected to perform toilet procedures in mixed day rooms without adequate privacy, resulting in a loss of dignity for these patients. Finally, elderly female patients may be sensitive and upset by the sight of confused male patients wandering about mixed wards and day rooms partially or totally unclothed.
I understand that a petition sharing the local community health council's concern about mixed wards is currently attracting hundreds of signatures in my constituency.
Last year, the Association of Nursing Practice, which is part of the Royal College of Nursing, concerned about the development of mixed wards, and after seeking evidence through the medium of the Nursing Standard in order to present a view representative of its profession, reached the conclusion that
 patients' attitudes, beliefs and wishes in this matter are not being taken into account and in some instances are even being disregarded.
Also last year, the Health Service Commissioner upheld the complaint of a woman patient that privacy was inadequate in the mixed ward to which she had been admitted and said that he was not satisfied that adequate provision was made in the hospital concerned for those who found the arrangement distasteful.
A number of gruesome reports have appeared in the press or have otherwise come to light of violence and other disturbing behaviour in mixed wards, which would be intolerable by any standards and which I hope will always be subject to the most vigorous investigation whenever they appear.
Since it became known that I was to raise this matter tonight I have received many letters, from men as well as women, from young people as well as from the elderly, and not just from my own constituency—and I would not judge any of them as prudes. All the people who have written to me, save one, express gratitude that at last these problems and concerns are being brought to the attention of the House.
Many of them refer to their own experiences in hospital, stressing that never again would they be prepared to be


treated in a mixed ward. Some even go so far as to say that they would refuse a hospital bed if it meant that they could not exercise freedom of choice of ward. One can understand their views when all they seek in entering hospital is to try to get well with maximum personal privacy and the preservation of human dignity.
Where there exists between beds nothing but scant screens or semi-transparent curtains, few patients are unlikely to be embarrassed or offended on being overheard discussing, or overhearing discussions on, intimate problems with a doctor or nurse, or by every sound associated with the calls of nature. I do not know whether men are prone to snore more uncontrollably than women or whether women are prone to chat more unceasingly than men, but if one is feeling really low it is a little late to find out from the behaviour of one's neighbour when one has opted for a mixed sex ward.
These are details which some doctors and health officials, and even some politicians, may regard as trivial in comparison with the major problem of a lack of hospital beds. Nevertheless, the House should accept that the practice of mixing the sexes in our hospitals against the wishes of the majority of patients smacks of expediency and is providing a second-best service.
Therefore, I ask the Minister to assure us, first, that no patient will enter a mixed ward without being given a choice and being adequately informed of the conditions and circumstances involved; secondly, that when a patient opts for a single sex ward there will be no threat of delay in treatment; and, thirdly, that where mixed wards exist, adequate partitions will be provided to maintain privacy. I should be glad to know whether minimum standards are laid down by the Department, and, if so, whether they are enforced.
Finally, will the Minister agree now to embark upon a process of consultation with every area health authority on the whole question of mixing the sexes in hospitals, to review the evidence of the problems that have arisen and to ask every community health council to seek and to discuss the views of the public, the consumer whom the hospital is there to serve?

11.10 p.m.

Mr. Tom Normanton: rose—

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Has the hon. Gentleman asked the permission of the hon. Member for Bournemouth, East (Mr. Atkinson) to intervene?

Mr. Normanton: Yes, Mr. Deputy Speaker.

Mr. Deputy Speaker: Very well.

Mr. Normanton: I should like to thank my hon. Friend the Member for Bournemouth, East (Mr. Atkinson) for allowing me to add briefly to his valuable contribution. I do so in the interests not of party political issues but of important social ones.
I wish to reinforce my hon. Friend's comments, and in view of the lateness of the hour I shall do so briefly. I recall the ever-increasing frequency with which my help has been sought by patients who, unwillingly, and without even a "by your leave", have had to face the experience which for some is traumatic in a moment of dire distress, of having to enter a mixed ward.
Unfortunately, many patients are faced with the alternative of a mixed ward or of receiving no medical treatment. Therefore, I readily endorse my hon. Friend's strictures. Will the Minister take it from me that in allowing this practice to continue, and indeed to increase, he is endorsing what many thousands of people, in their moment of dire need, see as an affront? Will the Minister institute the consultations to which reference has been made, not just with the nursing representatives or the area health boards but with authors of journals and magazines who play such a valuable part in promoting the interests of patients and nurses?
I see in this growing practice a classic example of the interests of the patient being prostituted in the cause of administrative convenience. Because of the way in which these matters are interpreted, that feeling is growing fast. It is another example of the kind of social engineering to which we on the Conservative Benches take the strongest possible objection. The aged, the young, the sick and the sensitive await the Minister's reply with more than passing interest.

The Minister of State, Department of Health and Social Security (Mr. Roland Moyle): I am grateful for this opportunity to explain my Department's attitude towards mixed sex wards and also to correct what appears to be a misapprehension toward the position in the constituency of the hon. Member for Bournemouth, East (Mr. Atkinson).
The term "mixed sex wards" is, at best, a convenient piece of shorthand, which conjure up rather a misleading image. I hope to explain what the term means. In recent years there has been a movement towards the systematic grouping of patients according to the degree of illness and dependence on the nurse rather than on simple classification by diagnosis or by sex. New hospital accommodation has enabled this concept to be applied. There is a separate grouping of beds in an overall ward area—such as in bays of four or six beds each. It is possible for men and women to be nursed in the same ward, but in the privacy of a bed area occupied by one sex only. In wards of this kind communal areas, such as day rooms for ambulant and other mobile patients to use if they wish, are frequently combined. I see no reason to discourage this trend.
In some older buildings, accommodation may also be arranged so that men and women may be nursed in the same ward—normally partitioned or otherwise separated from each other—but of necessity both sexes may share some sanitary facilities and whatever day space is available. All such accommodation must be provided in such a way as to maintain privacy and avoid embarrassment. From the information which I have received, this appears to cover the provision in the East Dorset health district, which covers the hon. Gentleman's constituency.
It is easy to see how, in certain circumstances, the use of such purpose-designed or adapted wards for both sexes enables the best use to be made of the resources available. This makes a contribution to the reduction of waiting lists. Preferably such wards should be in purpose-designed accommodation, as indeed they are in modern hospital accommodation. But I admit that older, upgraded accommodation has to be used in many of our hospitals. Where a health authority decides to utilise other

accommodation for both sexes, it must of course have regard to the need to ensure that reasonable privacy can be maintained and unnecessary embarrassment to patients avoided.
There are a number of circumstances where there are special advantages in desegregated accommodation. I have in mind, first, critically ill patients in intensive therapy units. The facilities are so specialised and the number of patients treated by them is so small that it would not be reasonable to provide separate accommodation. Most of these patients are unconscious or semi-conscious and there is an acute need for observation by nursing staff, which must take priority. The need of the patient for privacy should, however, be safeguarded as far as possible. Special units such as those for day surgery cases and programmed investigation units are also used by men and women, provided that there are appropriate arrangements to preserve propriety where both sexes occupy the units at the same time.
I should also mention that there have been found to be positive advantages for many patients, particularly for those with long-term or psychiatric illness in the provision of wards in which there is no segregation during the day.
The hon. Gentleman will wish to know that I am fully aware that when patients enter hospital their sensivity is heightened by apprehension. They will already be anxious about their health and worried by finding themselves in strange surroundings. They will be separated from the support of family and friends. During the course of treatment they may have to submit to questions and procedures which may seem to be an invasion of their privacy. For these to take place in the presence of members of the opposite sex may well add to their anxiety.
Most people in their daily lives expect a degree of separation of the sexes and privacy for certain activities. Any departure from these accepted norms can be upsetting. However important the contribution it makes, a therapeutic regime must be introduced to the prospective patient and his relatives with sympathetic understanding.
My Department has therefore drawn the attention of regional administrators, regional medical officers and regional nursing officers to the special need for


arrangements to protect privacy in mixed sex wards, particularly during medical examination. It is certainly my view that when a person is to be admitted to a hospital ward which contains patients of both sexes the hospital should give him or her prior notice of the intention. I hope that where patients have expressed themselves to be unhappy about mixed arrangements the hospital will, if at all possible, offer alternative accommodation. But this might lead to a situation where the patient's admission has to be deferred until a bed in a single sex ward becomes available. Therefore, I cannot give the guarantee for which I have been asked. It would be impossible to do so.
In the main, the representations which have reached my Department from various parts of the country have failed to indicate whether the writer has actually been a patient. My experience and that of the Department seems to be at variance with that of the hon. Gentleman in a mixed ward. We do not know to what extent the criticisms stem from personal experience and to what extent they may be based on a possibly erroneous picture of what a mixed ward is like. Nevertheless, as a basis for action, I accept that some people feel strongly about this matter, regardless of the reasons for the mixing of patients in any ward.
It is difficult to arrive at reliable information about the attitudes of patients towards the treatment that they have received, but a survey of over 400 patients, conducted in Manchester—an area where there are a number of mixed wards—showed that only about 12 per cent. of the patients interviewed objected to having been in mixed sex wards. A total of 58 per cent. said that if they returned to hospital they would not be bothered about being in a mixed ward. Just over 26 per cent. expressed a preference for such accommodation. Of course, because this evidence is a one-off survey, it has to be treated with a certain amount of reservation.
As I indicated to the hon. Member for Cheadle (Mr. Normanton), there is no centrally maintained record of the number of hospitals in which the mixed wards system is operated. That is because I regard the use and management of mixed wards as a matter for local decision. I shall not, therefore, be conducting extensive consultations with health authorities

and community health councils. I believe that these decisions are best left to local health authorities. It is a matter for local decision. Certainly I should not stand in the way of these decisions being taken if the proper departmental advice and guidance were followed. It is at the local level that administrators and their professional colleagues are best able to weigh up the various factors in deciding how best to use available resources.
In June 1978 the secretary of the East Dorset community health council wrote to the district administrator of the East Dorset health district on the subject of mixed wards. I should like to quote a few sentences from his letter:
 From discussions with local community groups I detect a growing concern at the practice of mixing male and female patients in hospital units and wards. Most people I speak with appear to accept the mixing of male and female patients in intensive care units 
—that, at least, is common ground—
 but consider that mixed units and wards are being introduced in other specialties where the mixture is unacceptable for a number of reasons ".
It goes on to say:
 Stories emanating from local community groups—which, in some instances, are forming the basis of reports being submitted for discussion at national conferences—lead one to feel that the local situation is worthy of a review.
I have looked at the letter. It reports a number of allegations, but mostly in general terms without specific instances, names or examples.
In response to that letter the district administrator reviewed the local situation and in August 1978 sent the community health council a detailed note on the mixed sex arrangements in the district. That showed that for the most part these were in intensive care or similar units or in children's wards and that the others—of which there were few—involved the use of wards subdivided into segregated single-sex bays, as I indicated earlier, or, in most cases, entailed no mixing other than in day rooms. However, there was a small number of male wards in which a number of beds—separated as far as possible from the rest of the ward—were set aside for the use of female patients when the pressure of demand for female beds made this necessary.
In his letter the district administrator stressed that, apart from intensive care, coronary care and paediatrics, wards were not routinely mixed, except where special factors made this necessary. It was notably commoner in geriatrics and other provisions where the demand for female beds often exceeded the supply. He made it clear that it was the district management team's policy not to mix patients if it could be avoided but to give them maximum privacy.
The district administrator was obviously unable to confirm or deny any of the allegations in the letter from the secretary of the community health council, but he offered to investigate any specific complaints. I understand that that offer has not yet been taken up. Here is a way in which the secretary of the community health council can process the matter forward. If he will submit specific complaints to the district administrator, he will do his best to investigate and reach a conclusion on them.
In the past five years the district concerned has received only one complaint about a mixed sex ward. That referred to an ad hoc mixing of orthopaedic patients which was briefly introduced to meet a sudden staff shortage resulting from sickness.
On 22 September the Bournemouth Times published a colourful report under the headline
 Mixed Wards Trend Shocks the Women Patients 
which attributed to the secretary of the East Dorset community health council the view that "hospital bosses" were pushing forward "the new system" despite fierce opposition from women patients. It seems significant against that background that when the East Dorset

community health council considered the question of mixed sex wards in October it did not make any representations to the district administrator or seek further explanations from him.
I gather that someone is organising a petition, but it is difficult for the district administrator to do other than assume that the community health council was satisfied with his explanation of the policy followed in the district, in view of the non-reaction of the council at that stage to his reply to the secretary. Apart from the petition, I am not aware of any new facts that have come to light to support the allegations referred to in the letter from the secretary of the community health council.
On the other hand, the district management team felt that it would be useful to draw up guidelines for arrangements in shared day rooms, and that has now been done, in the hope that it will relieve any sense of anxiety.
What is interesting about this episode is that it started not with specific complaints from patients but with vague allegations based, possibly, on a misunderstanding of the local policy. I hope that the explanations given by the district administrator to the community health council will help to reassure people in the Dorset East health district. Looking at the question nationally, I can only express the hope that, while there are bound to be variations throughout the country in both expectations and individual preferences, what I have said will assure those who may be worried by reports in the press or elsewhere about mixed wards that authorities concerned and their officers are fully aware of the importance of meeting the individual patient's need for privacy.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes past Eleven o'clock.